Invoice Factoring Blog

With all the disasters facing people in the United States this summer - from the recent Gulf oil spill to the spring floods in the south, and tornados in the midwest, you might find it of interest that the Small Business Administration (SBA) has stepped up its efforts to provide  low interest disaster loans in a declared disaster  to businesses of all sizes and private, non-profit organizations for their business assets and to repair or replace personal property, equipment, inventory,  machinery, and even real estate damaged or destroyed.   For a small business to survive the storm’s wake, many could turn to invoice factoring for assistance.

Link: http://www.ifgetwork.com

The Internal Revenue Service (IRS) announced that it is mailing a postcard campaign to more than four million small businesses notifying them to see if they qualify for a tax break designed to encourage smaller businesses not mandated by 2014 to provide health care to their low- and moderate-income workers.

The tax break is being offered in two phases -- the first phase being worth up to 35 percent of a qualifying businesses' premium health-care costs for tax years 2010 through 2013. The rate increases in the year 2014 to 50 percent, with a maximum length of potential coverage for qualifying employers at six taxable years: four years under phase one and two years under phase two.

Businesses must cover at least 50 percent of the cost of health-care coverage for some of their workers, employ fewer than the equivalent of 25 full-time workers and pay average annual wages below $50,000 in order to be eligable. Businesses are scrambling to come up with the funds to cover their employees based on the new health care reform laws.

Some companies have already thought of using  factoring of their invoices to come up with the money. This could be particularly helpful to those  businesses who are having financial challenges due to the economy, or for tose who simply do not have funds for this added expense. Invoice factoring  just might prove to be the answer.

Managing the finances for your business is important, and it is not enough to just think about raising capital and generating revenue - it is just as important to think about managing your cash flow. What does this mean? It means managing how your money and time, is spent. The goal is that you want to get the biggest return on investment for the time and money that you spend.

The economic downturn has caused many businesses to cut back in the area of spending altogether. Yet  investments such as marketing, when done right, will generate more business for your company. You will not be able to generate the cash flow required to grow your business if you do not have the funds from your clients, for marketing.

Invoice factoring can help.  This spending will return the amount while providing additional revenues – and these profits can be put back into your company to once again generate more business via factoring. In order to grow your business, factoring invoices that are 30-60 or 90 days out, will help you get these funds in earlier. You could then spend on marketing, and new business leads will come in. This means you can always pay employees on time, catch up on bills, and generate more money money that will help pay for production, supplies, equipment and other overhead expenses.

Most small businesses learn from their mistakes in their earlier years, but in today's economy, there is often not enough time to wait in order to turn a profit. Following are some tips for managing your cash flow and being more successful in your small business:

You must make sure to pay your vendors with a credit card, because it gives you more time to sell more inventory and collect from your customers and then pay the bill. If you pay a vendor 30 days after you make a purchase, and you have 20 days before you have to pay the credit card bill to avoid interest charges, meaning you have almost 50 days to pay.

Consider accepting credit cards from your customers, even though you must pay a credit card processing fee for each customer transaction. These fees can be up to three percent of the sale orders from online. You also sometimes have to pay per-transaction fees and a small monthly fee. The good news is that you will get your funds faster, then pay your bills on time, saving you more in interest fees.

Make sure that you invoice your customers in a timely fashion, because the faster you send out an invoices, the sooner you're likely to be paid by that customer. If you have invoices due in 60 or 90 days, think seriously about using invoice factoring to improve your cash flow and grow.

To learn more about invoice factoring, go to http://www.ifgnetwork.com

Link: http://www.ifgetwork.com

If you are a small to medium-sized company, today more than ever before, you know how the roller-coaster effect of our economy affects your cash flow. Businesses that need to improve cash flow are a good candidate for factoring financing programs.  Just a few examples include manufacturers, Government suppliers, subcontractors, builders and developers, service providers, professional service companies like qadvertising or marketing firms, security companies, healthcare industry businesses, electronics suppliers, recruiters, and transportation or freight,  just to name a few.

Invoice factoring is the fast track for these kinds of businesses to generate working capital that is needed desperately in today's economy to stay in business, and to grow. Factoring companies have been very busy this year, managing accounts receivables for ever-increasing numbers of  clients who are obtaining many benefits. For instance working with a factor like IFG can help them get a handle on their accounts receivables and cash flow management, which happens because payment of invoices purchased by IFG are contractually guaranteed and made on a scheduled basis.  There will be no more uncertainty regarding cash flow. This gives them the time, and the money to sell its products more aggressively, and then funds will be available when these new orders must be filled.

Accounts receivable factoring means funds will always be available for labor and materials prior to the completion of a contract, and the  company can also take advantage of specials on materials and cash discounts.

If you have a new business, you don't yet have a solid financial history and track record so therefore your personal credit rating will be linked to your business. Most credit institutions and banks look at small businesses as the personal fiduciary responsibility of the owner. It's very difficult for new businesses to be approved for business loans, credit lines or even lease agreements without the owner's credit history.

That is why it's important for business owners to make sure their personal credit histories are clean.  Verify your credit record by getting a free copy of your credit report from each of the three major credit bureaus: TransUnion, Equifax, and Experian.  Go to annualcreditreport.com to get your credit score. This is a number calculated by a formula, based on your credit report, and the higher the better. One popular score, the FICO score, ranges from 300 to 850. A newer scoring model, called VantageScore, runs from 501 to 990.  Once you have your score you can see if there are any mistakes, and how to improve the score in the future.

Thirty-five percent of a FICO score is based on payment history, and lenders want to know they're going to be paid. There are online tools  to guide you as you try to improve your credit. Go to SBA.gov or MyFico.com.  Last, until your credit score improves use invoice factoring to pay your bills on time, which will help your credit improve.

For more information on using factoring for your small business needs, contact www.ifgnetwork.com